Author Topic: Closed on our first rental  (Read 5299 times)

brandino29

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Closed on our first rental
« on: August 15, 2013, 09:33:11 AM »
Yesterday we closed on our first piece of rental investment property.  A small two bedroom 1.5 bath single family home in a nice neighborhood.  We got it for a steal at $65,000 (putting 20% down) while it appraised for $80,000. Hopefully after some weekend sweat equity we'll have it on the rental market next week for $800/month. 

MakingSenseofCents

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Re: Closed on our first rental
« Reply #1 on: August 15, 2013, 10:30:23 AM »
That is awesome! Congrats. Sounds like a great deal.

hybrid

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Re: Closed on our first rental
« Reply #2 on: August 15, 2013, 02:30:45 PM »
That sounds very much like what we did in early 2012, good for you!  We haven't regretted our decision.  Especially as home prices begin to creep back up.

One caveat, we put too much money into the place (in part because our daughter and not some stranger is renting it) and if we could claw some of that back the investment would be better.  Lessons learned for the next time.  But all in all it has worked well for us, we rent to our daughter at a few hundred under what the market would bear, and we never have to worry about the tenant.  Win-win. 
« Last Edit: August 15, 2013, 02:33:58 PM by hybrid »

brandino29

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Re: Closed on our first rental
« Reply #3 on: August 15, 2013, 02:44:01 PM »
But all in all it has worked well for us, we rent to our daughter at a few hundred under what the market would bear, and we never have to worry about the tenant.  Win-win.

That's great! We've already had a couple of suggestions for tenants that I'm hesitant about considering, including a cousin and his wife and the younger sister of a good friend of mine.  I'm not excited about either prospect. 

Part of the reason I want to have it cleaned up and ready to rent ASAP is simply so we don't put more money into it than we need to.  There is some speckling, repainting, and carpet shampooing that needs done but personally I think it's already move in ready. 

little stache

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Re: Closed on our first rental
« Reply #4 on: August 15, 2013, 08:34:47 PM »
Congratulations. Keep us posted on how it goes and what lessons we should take before we dive into this :).


SunshineGirl

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Re: Closed on our first rental
« Reply #5 on: August 15, 2013, 09:09:05 PM »
Your instinct is correct: Avoid renting to someone you'd have a hard time evicting or raising the rent on or charging for damage. There's just no point. This is your business.

vern

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Re: Closed on our first rental
« Reply #6 on: August 16, 2013, 12:19:14 AM »
Congratulations!

Now go get yourself a cup of coffee!


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arebelspy

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Re: Closed on our first rental
« Reply #7 on: August 16, 2013, 07:08:20 AM »
Nice!  The first step is huge.

Best advice I have for you: Tenant screening.  Tenant screening.  Tenant screening.

It will be the difference between a decade from now you telling a giagantic horror story about the time you tried a rental and how you "aren't cut out to be a landlord" or the difference between you owning a dozen with a minor horror story not even as bad as the former that you laugh at (because they will eventually happen..)
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

Kazimieras

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Re: Closed on our first rental
« Reply #8 on: August 16, 2013, 08:37:21 AM »
Best advice I have for you: Tenant screening.  Tenant screening.  Tenant screening.

+1 to this advice. Trust your gut and know the local laws for being a landlord. There is so much variation between states/provinces it isn't even funny.

Random

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Re: Closed on our first rental
« Reply #9 on: August 16, 2013, 05:34:02 PM »
I am stunned by your price.  $65k would get you a shipping container in Anchorage.  A starter home (small 2br) here would be ~$250k, maybe more.  We are renting a 1br studio apartment in our house for $900 (including utilities). 

brandino29

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Re: Closed on our first rental
« Reply #10 on: August 16, 2013, 08:52:31 PM »
I am stunned by your price.  $65k would get you a shipping container in Anchorage.  A starter home (small 2br) here would be ~$250k, maybe more.  We are renting a 1br studio apartment in our house for $900 (including utilities). 

Definitely the huge benefit to living in a low cost of living city (Charleston, WV). 

Sometimes we wish we were in a more exciting place and then I hear about friends in DC who want to buy a house, or family in NYC paying $1800 a month for a 1 bedroom apartment, and I think "we're doing okay here."

Hell, as a grad student in New Orleans I paid $600 a month for a bedroom in a 3 bedroom apt with two other roommates (also paying $600) and that was 'cheap.'  It's more than our mortgage here for a 1,500 sq ft house!

2527

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Re: Closed on our first rental
« Reply #11 on: August 17, 2013, 06:08:35 AM »
Congrats.  Please keep this thread going.  Tell us how selecting a tenant goes, maintenance, cash flow. 

Gin

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Re: Closed on our first rental
« Reply #12 on: August 17, 2013, 08:18:14 AM »
Congratulations!!  I did lots of research on my being a landlord.  Screening tennants was the first advice.  Second was don't drop how thorough you screen a tennant because you want it to rent fast.  The common theme I saw in horror stories was they were anxious to have the first tennant they weren't as thorough on the screening and paid for it in the long run.  If they could do over they would have let it sit empty and find the right tennant.  After my research realized right now is not right for us and instead investied in REIT.  I know I a, not a lamdlord just wanted to share what I learned from research.  Good luck!!

MrsHybrid

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Re: Closed on our first rental
« Reply #13 on: August 27, 2013, 08:40:34 AM »
Things got a bit out of hand on our rental because right after purchase Hybrid tore his Achilles' tendon and was out of commission. This caused me to have to hire someone to help me with the reno. One bit of advice: put in writing what you want done and get the charges up front. A handyman I had used numerous times and had become friendly with was doing the reno with me. He would "help" me do stuff I had not asked him to do and then charged me for it in the end. We also had a fiasco with the flooring as he wouldn't watch the installation video because he knew how to put in laminate flooring. Hybrid and I ended up doing the vast majority of the flooring (at least this guy let us use his equipment to do it).

I was working before and after work most of the summer (I deliver mail and often times my hours are long - cant tell you how many uniforms have paint on them). The final straw was when handyman told me I would have to pick a different light fixture for the bathroom because a stud was in the way and it would take him two hours to move the light location and install it. I did some research and did it my self in 30 minutes.

Yes I did put somethings in this rental that I would not have if it had not been frugal and very responsible daughter moving in. But it will pay off if and when we decide to sell although daughter says she loves it and is not planning on leaving for at least another 5 years.